Building society members: Why can’t we have more choice of auditor?

An interesting comment comes through from the Ecology, Britain’s youngest and most democratic building society.  The AGM this year had a lively discussion about why KPMG had to be chosen as the society’s auditor.  Wasn’t there a choice of auditor more in line with the Ecology’s ethical principles, some members asked?

Well, unfortunately no, not really, was the reply. The latest issue of the Ecology’s members’ newsletter has just come out, and it includes a summary of chief executive Paul Ellis’s response to those member concerns:

“There is a very high degree of concentration in the audit industry,” he writes. “There are, in fact, only four firms that we can approach for external audit, not all of whom are interested, and only five firms that we can approach for internal audit. Our regulators would not be happy if we tried to use a small local firm, even if we could find one that was willing to take on the task”.

But Ellis is clearly not comfortable with the present situation: “We need reform of the structure of the industry,” he argues.

The Ecology has its own blog discussion covering this issue in more detail.


Co-operative democracy at work

A hefty envelope has just arrived through the letterbox.  It’s a ballot paper and explanatory booklet for me to exercise my right as a member of Midcounties cooperative to vote for members of its Board of Directors.

Midcounties is one of the UK’s regional consumer cooperative societies, independent of the giant Co-operative Group although sharing with the Group the national cooperative branding. (I’ve written previously in more detail about Midcounties and its chief executive Ben Reid.)

Although I live outside the area of England where Midcounties operates its shops, I have chosen to become a member because I buy my electricity and gas through its subsidiary Co-operative Energy.  Midcounties generally has a strong reputation as one of the UK’s more innovative and entrepreneurial coop societies, and its venture into power supply is an example of this.

It deserves a pat on the back for encouraging member democracy.  No less than 16 people have put themselves forward for one of the five directorships to be filled this year.  I’ll have to read the candidates’ statements carefully of course… but what a pleasant contrast with, say, the usual situation with Building Society elections where Board places are generally uncontested.